Kitty Miv, Editor
28 August, 2019
With everything that's been going on in Europe, and on the international stage more broadly, it feels like a long time since we've taken a proper look at what's going on in the United States from a tax perspective. So – and quite apart from the fact that things are far too complicated in the UK and elsewhere to write about with any degree of certainty or authority – let's rectify that.
First of all, we turn to President Trump who, when not perplexing the Danes by attempting to purchase territory not for sale, was running a package of proposed tax cuts up the flagpole to see who was minded to salute.
Responding to press questions ahead of his bilateral meeting with Romanian President Klaus Iohannis at the White House, President Trump revealed on August 20 that the Government was exploring the idea of "various tax reductions."
In particular, Trump mentioned the possibility of indexing capitals gains to inflation for tax purposes, and of reducing payroll tax.
"I would love to do something on capital gains," he suggested, continuing: "We're talking about that. That's a big deal; it goes through Congress."
"Payroll tax is something that we think about and a lot of people would like to see that," he added.
Later in the month, it emerged that the Governments of France and the United States are reportedly close to settling a dispute surrounding France's digital services tax.
The US President had said that he intended to announce new tariffs on imports of French wine in response to the newly introduced French DST, which the US Government argued unfairly discriminates against US companies.
The French DST imposes a three percent tax rate on the revenue of digital companies providing advertising services, selling user data for advertising purposes, or performing intermediation services. Companies with global revenues of EUR750m (USD835m) or more and French sales of at least EUR25m are required to pay the tax.
The tax, approved by the French Parliament on July 11, 2019, will to apply to turnover realized in France since January 1, 2019, and is expected to affect around 30 companies supplying digital services in France.
The Office of the US Trade Representative (USTR) revealed recently that it had launched a Section 301 investigation into the new tax. Once the USTR begins a Section 301 investigation, it seeks a negotiated settlement with the foreign country concerned, which could involve either compensation or the elimination of the particular barrier or practice.
However, according to media reports, officials from the French and US Governments at the G7 Summit in Biarritz, France, were negotiating a deal that would see France refunding US companies the difference between their French DST payments and those that would be due under digital tax measures negotiated at OECD level, should the latter be lower.
Then on August 23, 2019, with his government appearing to be pouring oil over troubled waters in one area of international relations, President Trump tweeted that additional import tariffs on a range of Chinese goods would be raised by five percent from October, 2019.
Starting on October 1, the USD250bn of goods and products from China, currently being taxed at 25 percent, will be taxed at 30 percent," the President announced.
"Additionally, the remaining USD300bn of goods and products from China, that was being taxed from September 1 at 10 percent, will now be taxed at 15 percent," he continued.
According to the President, the new tariff hikes come in response to China's decision to increase tariffs on around USD75bn of US imports.
China's Ministry of Finance has revealed that the increased tariffs to which the US authorities are responding will be introduced in September and December 2019 and will affect agricultural and energy products, including crude oil. Tariffs of 25 percent will also be imposed on US automotive parts from December 15, 2019.
« Go Back to Blogs